FAFO. It’s real.
In less than three weeks, President Trump has thrown the U.S. clean energy industry into chaos, with much of the economic damage hitting Republican states and districts.
In a quest to eliminate any funding linked to climate change, the Trump administration has frozen federal grants for everything from battery factories to electric school buses and issued executive orders that have halted federal approvals for wind and solar projects.
Mr. Trump and Republicans in Congress are also working to repeal the 2022 Inflation Reduction Act, which is projected to pour hundreds of billions of dollars over the next decade into low-carbon energy technologies through tax credits, loans and grants.
So far, Republican-voting communities have benefited the most from that law. In the nearly three years since it was passed, private companies chasing the law’s tax breaks have announced plans to spend $165.8 billion to build factories that make solar panels, wind turbines, electric vehicles and more, according to new data from Atlas Public Policy, a research firm. Roughly 80 percent of those investments are in Republican congressional districts, where they are creating a once-in-a-generation manufacturing boom.
The Inflation Reduction Act, along with a separate 2021 bipartisan infrastructure law, also provided tens of billions of dollars in grants that have since been awarded by the federal government to private companies, states and nonprofit organizations. These are legally binding obligations that have allowed companies to make investments, sign leases and hire workers, with the expectation that they would be reimbursed by the government.
Two federal judges have ordered the Trump administration to end its freeze and release money from programs authorized by Congress, but there is evidence that several agencies are still blocking funding.
The uncertainty is delaying projects and halting investments in areas that voted for Mr. Trump. In Montana, a biofuels plant did not receive on time a $782 million payment it was owed, the first part of a $1.67 billion federal loan guarantee. In Georgia, $1 billion in projects to modernize the power grid are on hold. In Nevada, a half-dozen large solar projects on federal lands are caught in a permitting freeze.
The upheaval has put Republicans in the tricky position of defending a White House that deems money for clean energy a “waste of taxpayer dollars” while working behind the scenes to protect their towns from the loss of new manufacturing jobs.
With President Donald Trump’s victory in November, Texas LNG companies were celebratory, ready for a promised end to a federal pause in permitting that threatened their future.
But even as the Trump administration makes moves to expand U.S. exports of oil and natural gas, Trump’s hard-nosed trade tactics are ratcheting up uncertainty within some of the largest foreign markets for U.S. liquefied natural gas.
China, the world’s largest importer of liquefied natural gas, announced Tuesday it was placing a 15% tariff on U.S. LNG, in response to Trump’s decision to impose an additional 10% tariff on Chinese goods. And Trump is weighing tariffs on the European Union, setting up the possibility of a trade war with what is currently the largest market for American LNG.
That has left developers wondering about future demand for their product abroad, even as Trump moves to resume federal permitting for LNG projects. Production of LNG is centered along the Texas and Louisiana Gulf coasts, and developers are considering investing tens of billions of dollars to develop new terminals.
“I wouldn’t feel confident on making predictions,” said Charlie Riedl, executive director for the Center for Liquefied Natural Gas. “We’re in the early days in all of this. It feels fluid, like we’re still an opening salvo of the trade discussions.”
For now, LNG terminals along the Texas Gulf Coast are expected to see a slight decline in exports to China, which represented 4% of all U.S. LNG exports in 2023. The vast majority of U.S. LNG going to China is under contract, but Chinese companies buying in the open market are expected to shift their purchases to other nations, such as Qatar and Australia.
More significant is Europe, which has become the largest customer for U.S. LNG since the Russian invasion of Ukraine in 2022. Two-thirds of U.S. LNG exports went to the Netherlands, France, the United Kingdom and other European nations, the Department of Energy reported last year.
Trump told reporters on Monday that tariffs on European goods could be coming, “pretty soon.”
“They don’t take our cars, they don’t take our farm products, they take almost nothing and we take everything from them. Millions of cars, tremendous amounts of food and farm products,” he said.
European leaders are hoping to work out a deal with Trump to avoid a trade war and have hinted at the possibility of increasing LNG imports from the United States to assuage the new president.
The White House repeatedly said the freeze of agriculture funding and other federal financial assistance would not affect benefits that go directly to individuals, such as farmers. The administration rescinded the pause after a federal judge temporarily halted its implementation.
But over the weekend, farmers reported that their funding remained frozen — another blow to farmers who are also facing threats of tariffs and freezes to foreign-aid spending that involved food purchased from American producers.
In a statement, a USDA spokesperson said the Trump administration “rightfully has asked for a comprehensive review of all contracts, work, and personnel across all federal agencies.”
“Anything that violates the President’s Executive Orders will be subject for review,” the statement said. “The Department of Agriculture will be happy to provide a response to interested parties once Brooke Rollins is confirmed [as secretary of agriculture] and has the opportunity to analyze these reviews.”